Lotus opts to wait for higher uranium prices before restarting production at Kayelekera

Thu 11 Aug 22, 11:22am (AEDT)
Nuclear reactors in a yellow field
Source: iStock

Key Points

  • Lotus Resources DFS confirms a "low-cost, quick restart" for the Kayelekera Project in Malawi
  • The company will wait for higher uranium prices before making a final investment decision

Lotus Resources (ASX: LOT) says its Kayelekera Project in Malawi ranks as one of the lowest capital cost uranium projects globally and able to recommence production in just 15 months.

Still, the company insists on waiting for uranium prices to reach an appropriate level before making a final investment decision.

From a cost perspective, all-in sustaining costs sit at US$36.2/lb (during the first 7 years of production) compared to current uranium spot prices of US$48.70.

"We believe we are still in the early stages of the uranium market up cycle and are confident that the uranium price still has some way to go before it peaks," said Managing Director Keith Bowes.

Kayelekera Restart DFS at a glance

Key Outputs

Life of Mine Total/Average

Mine Life (Years)


Steady State Annual Production (MLbs)


Life of Mine Production (Mlbs)


AISC (US$/lb)


Initial Capital Cost (US$m)


Capital Cost Contingency (US$m)


Source: Lotus Resources | Table: Market Index

Low costs backed by exploration upside

Initial upfront capital costs remain "one of the lowest in the industry", according to Bowes.

"The operating costs during steady state in the initial mining phase (i.e. before stockpile treatment commences) now sit at US$29.1/lb U3O8, well within the second quartile costs for current and planned uranium producers," he added.

Kayelekera has a current mine life of 9.5 years, subject to further exploration upside from near-by tenements Livingstonia and Chilumba.

Regional exploration at Livingstonia successfully defined a Mineral Resource Estimate of 4.8m lbs of inferred and at Chilumba, a 1,500m drilling program was recently completed and pending assay results.

Next steps

Lotus plans to advance several key areas ahead of its final investment decision including:

  • Uranium offtake agreements

  • Financing negotiations

  • Scope and costs for front-end engineering design

In terms of offtake, Bowes said the company will "look to lock in prices that ensure long-term profitability and good returns for our investors."

"Momentum in the market is positive with strong underlying fundamentals which indicate continuing price increases that could see the necessary pricing levels achieved relatively soon,' noted the DFS study.

Lotus Resources share price chart
Lotus Resources share price chart


Related Tags

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and insights direct to your inbox

Subscribe free